Pax Silica: Inside the Trump Administration’s Tech Strategy with US Under Secretary of State for Economic Affairs Jacob Helberg

**Jacob Helberg** (0:00)
We're not going to do government-operated supply chains, because that's not how we shine as a country. Our superpower is really our private sector and our companies. The old Steve Jobs quote that, American products enchant and delight users around the world by the billions. That is really is our edge as a country. And so the answer has been trying to work in lockstep with our private companies and our builders to build platforms that are commercially viable, and that can ultimately live outside of the government as a private service.

**Sarah Guo** (0:41)
Today, No Priors were joined by Jacob Helberg, the Undersecretary of State for Economic Affairs. We spoke with Jacob before he was confirmed in this role, and we're very excited to have him back to discuss Pax Silica, which is a multi-nation effort to secure the AI supply chain for the United States and its allies.

**Elad Gil** (0:58)
Jacob, thanks so much for being here.

**Sarah Guo** (1:00)
Yeah, thanks for joining us.

**Jacob Helberg** (1:01)
Thanks for having me.

**Elad Gil** (1:02)
So let's get right into it. Three months ago, you announced Pax Silica, super ambitious coalition. Can you explain what it is and where you are in it?

**Jacob Helberg** (1:11)
Yeah, absolutely. So I gave a speech at the Hudson Institute that was really meant to be our blueprint for Pax Silica. Pax Silica is an economic security coalition that now has 14 countries. And the idea is really to have an ecosystems-based approach to our supply chains and specifically the AI supply chain. And in my speech at Hudson, I outlined our different lines of efforts, including our policy roadmap and our projects. And about a week and a half ago, we basically did the first big, you know, what would be the tech equivalent of a product rollout, where we announced a forward deployed industrial base with our oldest ally in Asia, the Philippines. We made this arrangement with them, where they are granting us 4,000 acres, which is obviously very substantial. It's a third of the size of Manhattan. To do a very large industrial build out, that's one of a kind that helps combine the predictability and certainty of the American common law system with the industrial comparative advantages that the Philippines offers. The goal is really to secure inputs that are vital for our supply chains.
We're super excited to be here in San Francisco, talk to builders and see ways that we can actually accelerate supply chain security for our tech companies.

**Sarah Guo** (2:23)
Is this set up as a special economic zone in the Philippines? Or can you tell us more about the details beyond the legal side that you mentioned?

**Jacob Helberg** (2:30)
Yeah, absolutely.
Right now, there are two phases to the plan. The first phase is the State Department taking into custody the zone. We are referring to it as an economic security zone because it is a very unique type of arrangement. The State Department has authorities to take in land and property into custody, sort of how foreign governments gift the State Department counselors, and counselors, and embassies. It's very unique to do a gift of 4,000 acres, but fortunately, there's no statutory limits on how big or small property can be. And so that's phase one. So right now, it's actually diplomatic property that is effectively governed by the same laws as our embassies are. Phase two will be the long-term development and build out of the land. And so we are going to spend, we have two years, a two-year window to negotiate the details with our Filipino counterparts on the investor protections that will apply to the land, the taxation regimes, and all of the different legal safeguards that investors will be able to benefit from for the long-term. And the goal is within that two-year window to actually have a long-term framework that will be multiple decades.

**Elad Gil** (3:51)
It's an amazing innovation. Are there specific domains that you think makes sense to invest in there from a manufacturing, mineral processing, whatever it is perspective now?

**Jacob Helberg** (4:01)
Yeah. So the goal is really to actually test a concept that could potentially be replicable. I mean, right now, if, you know, when we think about the AI supply chain, a lot of people just think of chips, but the reality is that the AI supply chain actually includes thousands of inputs like precision reducers and server motors and rare earth magnets and actuators, and our concentration risk as a country is incredibly high for basically all of those inputs. And so the goal is to identify key geographies that actually have industrial strengths and bring unique capabilities to the table that could actually help us move the needle meaningfully in different segments of the supply chain. So the Philippines already has a native, indigenous manufacturing ecosystem that's already quite deep.